India Share Sales, Deutsche Telekom, DJE Kapital: Compliance

Dec. 30 (Bloomberg) -- India’s capital market regulator is
reviewing the initial public offering process to stop companies
from raising funds using falsified information, after seven
firms were found to have violated rules.

The Securities and Exchange Board of India will take some
“immediate measures” following its investigation into the
seven IPOs, Chairman U.K. Sinha said yesterday. The regulator
barred the companies from raising more money from the capital
markets, according to separate rulings posted on its website.

The latest ruling is part of the authorities’ move to raise
corporate governance standards in the $1 trillion market and
attract more overseas investors. The SEBI order showed that the
companies including Bharatiya Global Infomedia Ltd. and PG
Electroplast Ltd. failed to make full disclosures and misused
the share sale proceeds.

Taksheel Solutions Ltd., Tijaria Polypipes Ltd., Brooks
Laboratories Ltd., Onelife Capital Advisors Ltd. and RDB
Rasayans Ltd. were the other companies barred from accessing
public funds, according to the regulator’s statement. SEBI asked
the companies to place the unutilized money from their share
sales in an interest-bearing escrow account with a bank.

The companies have lost at least half their market value
since their listing in the past six months.

Rakesh Bhhatia, chairman of Bharatiya Global, wasn’t
available at his office in Noida, near Delhi, when called for
comment.

Sumit Gupta, an assistant vice president at Onelife
Capital, declined to comment, saying the company is studying the
order. Officials at the other six firms weren’t available to
comment when Bloomberg News called their offices.

Vinay Mehta, chief executive officer of Almondz Global
wasn’t immediately available for comment at his office in New
Delhi, while Gurunath Mudlapur, managing director of Atherstone
Capital, didn’t answer two calls to his cellphone. J. K.
Agarwal, chief operating officer at PNB Investment declined to
comment.

Compliance Policy

Gulf Lease Sales Will Reduce U.S. Oil Dependence, Agency Finds

Ten planned lease sales in the Gulf of Mexico will reduce
dependence on foreign oil, the U.S. Interior Department said in
a draft environmental review.

The sales, planned for 2012 to 2017, will be off the coasts
of Texas, Louisiana, Mississippi and Alabama, the department’s
Bureau of Ocean Energy Management said in the proposed
environmental-impact statement released yesterday.

President Barack Obama has set a target of reducing oil
imports by a third by 2025. BP Plc’s offshore oil spill in 2010,
the worst in U.S. waters, caused the administration to postpone
lease sales to toughen offshore regulations. Republican
presidential candidates including Texas Governor Rick Perry have
said Obama isn’t permitting enough drilling to create jobs and
reduce imports.

Bureau director Tommy Beaudreau said in a statement
yesterday that the release of the draft was “an important
step” toward implementing the administration’s offshore-leasing
plans.

The analysis covers the western and central parts of the
Gulf, which cover more than 95 million acres combined, according
to the report.

Among new regulatory standards imposed after the BP spill,
which poured about 4.9 million barrels of crude into the gulf,
are requirements to certify that the well design is appropriate
and that shear rams in a blowout preventer can cut pipe to
prevent a spill.

The department announced three public hearings on the
draft, starting on Jan. 10 in Houston. Sessions are also
scheduled for Jan. 11 in New Orleans and Jan. 12 in Spanish
Fort, Alabama.

The public has 45 days to submit written comments to the
department before release of a final version.

Saudi Arabia to Set New Market Rules Mid-January, Reuters Says

Saudi Arabia, the country with the largest stock market in
the Middle East, plans to unveil new stock market rules on Jan.
15 to further open the Saudi Stock Market to direct investments
by foreigners, according to a report by Reuters, citing a source
who declined to be identified.

Dialog about the rules is “clearly intensifying” and the
exchange is “looking at mid-January for publishing the term
sheet for access,” the source said, according to Reuters.

Foreigners can invest in stocks listed on the Saudi Stock
Exchange by share swap transactions, which are purchased through
international banks that deal with local partners, Reuters said.
The local banks are fighting the new rules because they do not
want “to be cut out of the deal,” the news service reported.

If the rules are implemented, the cost basis of trading is
expected to come down by 70 to 80 basis points, according to the
source, Reuters said.

India’s Upper House of Parliament Adjourns Without Graft Vote

India’s upper house of parliament adjourned amid uproar
without voting on a bill to curb graft, as regional politicians
protested parts of the legislation.

Indian upper house lawmakers yesterday debated a bill to
curb corruption as Prime Minister Manmohan Singh fights to
secure its passage after activist Anna Hazare ended his public
fast early amid signs he may be losing support.

Approval in the upper chamber, where the ruling coalition
is 28 seats short of a majority, is the final hurdle for
legislation Singh is seeking to end a year of protests over
alleged graft that have weakened his government, stalled policy
making as Asia’s third largest economy slowed and led to the
jailing of a minister and business executives.

The government must win the support of independent and
regional lawmakers to clear the bill in the upper house, or
Rajya Sabha. The bill, known as the Lokpal, passed in the lower
house Dec. 27. An extended session of parliament was expected to
end yesterday.

Singh’s government defeated Dec. 27 attempts by lower house
lawmakers from several parties to give the proposed anti-graft
ombudsman overall control of the country’s main criminal
investigation agency, also a key demand of Hazare, who argues it
is the only way to ensure the new body has the powers to probe
and punish those accused of corruption.

For more, click here and click here.

Fed Says Dealers Tighten Terms on Hedge-Fund Security Trades

Wall Street dealers made it tougher for hedge funds to
finance trading of securities and derivatives in the three
months through November, a Federal Reserve survey showed
yesterday.

Responses “indicated a broad but moderate tightening of
credit terms applicable to important classes of
counterparties,” especially hedge-fund clients, trading real
estate investment trusts and nonfinancial corporations,
according to the quarterly survey of senior credit officers at
20 dealers covering the period of September to November. The
central bank released the report in Washington.

The report adds to evidence of stress in the financial
system from Europe’s sovereign-debt crisis. Investor concern
about the continent’s turmoil has helped drive the premium banks
pay to borrow dollars to the highest in more than two years. The
Fed survey didn’t discuss causes of the tighter financing terms.

Respondents reporting tougher borrowing terms for hedge
funds “most frequently pointed to a worsening in general market
liquidity and functioning and to reduced willingness to take on
risk and, to a lesser extent, adoption of more-stringent market
conventions and deterioration in the strength of counterparties
as the reasons,” the Fed said.

The decision is “credit positive” for Aldar and will
reduce unease about debt maturing in 2012, the ratings company
said in a note to investors yesterday. The developer’s credit
profile will benefit from increased certainty about cash flow
and less risk from property market volatility, Moody’s said.

The government will purchase 760 homes in the Al Raha Beach
development and retire 5 billion dirhams of debt related to
infrastructure on Yas Island, Aldar said in a statement Dec. 28.

Developers in Abu Dhabi and neighboring emirate Dubai are
struggling to pay down debts after property prices fell by more
than half since the market’s peak in 2008. The latest agreement
takes the amount of government spending on Aldar, Abu Dhabi’s
biggest developer, to 36 billion dirhams this year. The state
also contributed to a $20 billion bailout of Dubai in 2009.

The government will also buy 5.7 billion dirhams of assets
in Central Market, a project in downtown Abu Dhabi, and finance
the completion of the district’s redevelopment. Aldar will
receive 4.5 billion dirhams in the next two months as part of
the agreement and the rest will be paid over four years,
according to the statement. The deal will immediately reduce
Aldar’s debt by 5 billion dirhams.

Moody’s said it will make a more detailed assessment of the
effect of the government aid on the company’s medium-term credit
and plans to revise its financial forecasts for the company.

For more, click here.

Courts

SEC Settles Overseas Bribery Case With Deutsche Telekom

Magyar Telekom, based in Budapest, will disgorge $31.2
million and pay a $59.6 million criminal penalty as part of a
deferred prosecution agreement with the U.S. Department of
Justice, according to a statement yesterday by the U.S.
Securities and Exchange Commission. The Bonn-based parent
company will pay $4.36 million as part of a DOJ non-prosecution
agreement, the SEC said. Both companies settled a civil suit
filed yesterday with the SEC.

Magyar Telekom, Hungary’s former phone monopoly, in June
said it set aside 11.7 billion forint ($48.7 million) as it
negotiated a settlement with the SEC over FCPA violations.

The SEC filed separate lawsuits in federal court in
Manhattan against the companies and three former executives of
Magyar Telekom. The defendants are former Chief Executive
Officer Elek Straub, former Director of Central Strategic
Organization Andras Balogh and former Director of Business
Development and Acquisitions in the Central Strategic
Organization Tamas Morvai.

“Deutsche Telekom has not been accused of violating the
ban on bribery,” the company said in an e-mailed statement
forwarded by spokeswoman Elpida Trizi. “The settlement
terminates the investigations against Deutsche Telekom without a
criminal charge.”

“The final settlements recognize the DOJ’s and the SEC’s
consideration of the company’s self-reporting, thorough internal
investigation, remediation and cooperation with the DOJ’s and
the SEC’s investigations,” Magyar Telekom said in a statement.

Lawyers for the three former executives couldn’t
immediately be reached for comment about the lawsuit.

The cases are U.S. Securities and Exchange Commission v.
Magyar Telekom Plc, 11-cv-9646, and U.S. Securities and Exchange
Commission v. Straub, 11-cv-9645, U.S. District Court, Southern
District of New York (Manhattan).

Interviews/Speeches

Attorney Burns Says Hurd Letter Raises Legal Questions

Douglas Burns, a former federal prosecutor, talks about a
letter released by a court yesterday which alleges former
Hewlett-Packard Co. Chief Executive Officer Mark Hurd tried to
persuade Jodie Fisher to have sex and kissed and touched her
inappropriately while she was a company events contractor.

Hurd’s relationship with Fisher led to his resignation as
CEO on Aug. 6, 2010, after a company investigation found he had
violated its standards of business conduct.

Comings and Goings/Business Closures

Juncker Has No Plans to Step Down as Premier in Next Few Years

Luxembourg’s prime minister, Jean-Claude Juncker, said he
has no plans to step down from his post in “the next few
years.”

Juncker, whose chairmanship of the group of euro-area
finance ministers ends in mid-2012, said he won’t seek to remain
in charge of the group when the job becomes full-time.

The prime minister made the comments in an interview with
the Luxemburger Wort newspaper that will be published today.

He said the decision about “how this position would work”
will be made in May or June.

Juncker added that Europe faces a “great catastrophe”
without budget consolidation and a reduction of public debt in
the region.

Germany’s DJE Kapital Closes $291 Million Real-Estate Fund

DJE Kapital AG said its investment unit closed a property
fund with assets of 225 million euros ($291 million) because of
“difficult” market conditions.

The DJE Real Estate fund was closed yesterday after a large
number of investors withdrew their money, DJE Investment SA said
in an e-mailed statement yesterday.

Germany’s 85 billion-euro real-estate mutual fund industry
may be facing the biggest crisis in its 50-year history. A dozen
of the 44 funds, which own 28 percent of the industry’s assets,
are liquidating or have suspended redemptions, according to
Frankfurt-based BVI Bundesverband Investment & Asset Management.

DJE Kapital is based in Pullach, a town near Munich,
according to its website. DJE Investment’s headquarters are in
Luxembourg.